1966 (10) TMI 8 - HC - Income Tax

Family Property - Whether on the facts and in the circumstances of the case the proper status to be taken in the income-tax assessment of the assessee is individual or HUF

Summary

Issues Involved:
1. Proper status for income-tax assessment: individual or Hindu undivided family (HUF).
2. Applicability of section 9(4) of the Income-tax Act, 1922, to the house properties' income.
3. Validity of the custom of impartibility under Article 14 of the Constitution of India.

Detailed Analysis:

Issue 1: Proper Status for Income-tax Assessment: Individual or Hindu Undivided Family (HUF)
The central issue was whether the assessee should be assessed as an individual or as a Hindu undivided family (HUF). The Tribunal and the department had previously assessed the assessee as an individual, considering the properties as impartible and governed by the rule of primogeniture. The assessee argued that the properties were ancestral and should be assessed as HUF.

The Tribunal noted that the properties were inherited from the assessee's father and were governed by the rule of primogeniture, making them impartible and thus assessable as individual properties. The Tribunal also referred to the Marwar Land Revenue Act, 1949, and its repeal by the Rajasthan Land Revenue Act, 1956, concluding that the parties were restored to their personal law, which was customary law.

The High Court disagreed with the Tribunal's interpretation, emphasizing that the Marwar Land Revenue Act's repeal did not nullify the statutory restrictions on jagir lands. The Court cited Section 137 of the Rajasthan Land Revenue Act, 1956, which preserved the provisions of the Marwar Land Revenue Act regarding succession and transfer of estates. The Court also clarified that incorporation of self-acquired immovable property with an impartible estate requires clear evidence of intention, which was absent in this case.

The Court concluded that the properties in question were not part of the impartible estate and, therefore, could be treated as self-acquired properties. The assessee had the right to blend these properties with the HUF properties by expressing a clear intention, which was evident from the consistent filing of returns as HUF and the department's acceptance of this status in previous years.

Issue 2: Applicability of Section 9(4) of the Income-tax Act, 1922
Both parties agreed that this issue did not arise in the case, and it was not addressed further.

Issue 3: Validity of the Custom of Impartibility under Article 14 of the Constitution of India
This issue was also not pressed by either party and was not addressed in the judgment.

Conclusion:
The High Court held that the proper status for the assessee in the relevant income-tax assessments was that of a Hindu undivided family (HUF) and not an individual. The other two questions were not pressed, and no answers were provided for them. The parties were directed to bear their own costs of the reference.

Question No. 1 answered accordingly.